ASX:TNK

Stock Analysis Report

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Executive Summary

Think Childcare Limited owns, operates, and manages child care facilities in Australia.


Snowflake Analysis

Good value with reasonable growth potential.


Similar Companies

Share Price & News

How has Think Childcare's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TNK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

TNK

-7.3%

AU Consumer Services

-2.0%

AU Market


1 Year Return

-47.5%

TNK

-35.0%

AU Consumer Services

-12.0%

AU Market

Return vs Industry: TNK underperformed the Australian Consumer Services industry which returned -35% over the past year.

Return vs Market: TNK underperformed the Australian Market which returned -12% over the past year.


Shareholder returns

TNKIndustryMarket
7 Day0%-7.3%-2.0%
30 Day-6.7%-8.0%1.5%
90 Day-1.8%0.4%12.0%
1 Year-43.5%-47.5%-32.0%-35.0%-8.4%-12.0%
3 Year-54.1%-60.9%-12.9%-23.7%15.3%0.003%
5 Year26.5%-2.3%-45.1%-56.9%28.8%0.9%

Price Volatility Vs. Market

How volatile is Think Childcare's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Think Childcare undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TNK (A$0.84) is trading below our estimate of fair value (A$10.12)

Significantly Below Fair Value: TNK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TNK is poor value based on its PE Ratio (24.2x) compared to the AU Consumer Services industry average (14.3x).

PE vs Market: TNK is poor value based on its PE Ratio (24.2x) compared to the Australian market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: TNK is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: TNK is good value based on its PB Ratio (1x) compared to the AU Consumer Services industry average (1.3x).


Next Steps

Future Growth

How is Think Childcare forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

44.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNK's forecast earnings growth (44.6% per year) is above the savings rate (2.3%).

Earnings vs Market: TNK's earnings (44.6% per year) are forecast to grow faster than the Australian market (14.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TNK's revenue (18.1% per year) is forecast to grow faster than the Australian market (4.3% per year).

High Growth Revenue: TNK's revenue (18.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TNK's Return on Equity is forecast to be low in 3 years time (19.7%).


Next Steps

Past Performance

How has Think Childcare performed over the past 5 years?

21.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TNK has high quality earnings.

Growing Profit Margin: TNK's current net profit margins (1.7%) are lower than last year (5.8%).


Past Earnings Growth Analysis

Earnings Trend: TNK has become profitable over the past 5 years, growing earnings by 21.4% per year.

Accelerating Growth: TNK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TNK had negative earnings growth (-59.5%) over the past year, making it difficult to compare to the Consumer Services industry average (-1.1%).


Return on Equity

High ROE: TNK's Return on Equity (3.6%) is considered low.


Next Steps

Financial Health

How is Think Childcare's financial position?


Financial Position Analysis

Short Term Liabilities: TNK's short term assets (A$19.0M) do not cover its short term liabilities (A$35.0M).

Long Term Liabilities: TNK's short term assets (A$19.0M) do not cover its long term liabilities (A$204.2M).


Debt to Equity History and Analysis

Debt Level: TNK's debt to equity ratio (78.2%) is considered high.

Reducing Debt: TNK's debt to equity ratio has increased from 39.7% to 78.2% over the past 5 years.

Debt Coverage: TNK's debt is well covered by operating cash flow (51.3%).

Interest Coverage: TNK's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Think Childcare current dividend yield, its reliability and sustainability?

11.90%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TNK's dividend (11.9%) is higher than the bottom 25% of dividend payers in the Australian market (2.53%).

High Dividend: TNK's dividend (11.9%) is in the top 25% of dividend payers in the Australian market (6.54%)


Stability and Growth of Payments

Stable Dividend: TNK has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: TNK's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (201.6%), TNK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TNK's dividends in 3 years are forecast to be covered by earnings (74.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Mathew Edwards

5.83yrs

Tenure

AU$521,691

Compensation

Mr. Mathew Edwards serves as the Chief Executive Officer of Think Childcare Limited. since September 17, 2014 and serves as its Managing Director. Mr. Edwards has been involved in childcare since 2001. He  ...


CEO Compensation Analysis

Compensation vs Market: Mathew's total compensation ($USD362.71K) is above average for companies of similar size in the Australian market ($USD262.46K).

Compensation vs Earnings: Mathew's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mathew Edwards
MD, CEO & Executive Director5.83yrsAU$521.69k22.31% A$11.6m
Jennifer Saliba
Chief Financial Officer2.25yrsAU$614.82k0.066% A$34.5k
Georgina Gaussen
Chief Operating Officer0.75yrAU$340.44kno data
Trinh Bui
Head of Legal Counsel & Joint Company Secretary2.17yrsno datano data
Mourice Garbutt
Joint Company Secretaryno datano datano data

2.2yrs

Average Tenure

Experienced Management: TNK's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mathew Edwards
MD, CEO & Executive Director5.83yrsAU$521.69k22.31% A$11.6m
Mark Kerr
Independent Non-Executive Chairmanno dataAU$131.90k2.99% A$1.6m
Joe Dicks
Independent Non-Executive Director2.17yrsAU$75.00kno data
James Roland-Travers Spenceley
Non-Executive Director0.17yrno datano data
Evonne Collier
Independent Non-Executive Director2.25yrsAU$75.00kno data

2.2yrs

Average Tenure

Experienced Board: TNK's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TNK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Think Childcare Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Think Childcare Limited
  • Ticker: TNK
  • Exchange: ASX
  • Founded: 2014
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: AU$51.900m
  • Shares outstanding: 61.06m
  • Website: https://www.thinkchildcare.com.au

Number of Employees


Location

  • Think Childcare Limited
  • 1 Park Avenue
  • Suite 3
  • Drummoyne
  • New South Wales
  • 2047
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TNKASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDOct 2014

Biography

Think Childcare Limited owns, operates, and manages child care facilities in Australia. The company operates through Child Care Operations and Child Care Development segments. It offers full or part-time care services for babies, toddlers, and young children. The company also offers consultancy services to third parties and incubator partners to identify and develop greenfield services. As of December 31, 2019, it owned and operated 72 child care facilities. The company was formerly known as Think Childcare and Education Limited and changed its name to Think Childcare Limited in July 2015. Think Childcare Limited was incorporated in 2014 and is headquartered in Drummoyne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 10:36
End of Day Share Price2020/07/13 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.